Air New Zealand lowers first-half earnings forecast

Air New Zealand has warned that its first-half earnings for the 2024 financial year are likely to be at the lower end of its previous guidance.

The airline had initially provided a range of $180 million to $230 million for its first-half earnings.

Air New Zealand cited softness in domestic travel, particularly in corporate and government travel, as well as weaker late booking activity compared to the previous year.

It has also noted softer leisure demand in both the domestic and trans-Tasman markets.

While demand for travel to North America remains solid, the airline is facing increased pricing pressure due to competition from US carriers.

Demand for travel to Asia and the Pacific Islands remains unchanged.

The company has included $45 million of Covid-related credits in its earnings guidance, which it deems highly unlikely to be redeemed by the extended expiry date.

Air New Zealand is also still dealing with the ongoing impacts of the global Pratt & Whitney engine issues and is mindful of economic and inflation risks.

As a result, it has decided not to provide full-year guidance at this time.

The airline expects the second half of the financial year to be increasingly challenging, but it cautioned against extrapolating the first-half guidance.